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Plan Your Business Plan Before you put pen to paper, find out how to assess your business's goals and objectives.

You've decided to write a business plan, and you're ready to get started. Congratulations. You've just greatly increased the chances that your business venture will succeed. But before you start drafting your plan, you need to--you guessed it--plan your draft.

One of the most important reasons to plan your plan is that you may be held accountable for the projections and proposals it contains. That's especially true if you use your plan to raise money to finance your company. Let's say you forecast opening four new locations in the second year of your retail operation. An investor may have a beef if, due to circumstances you could have foreseen, you only open two. A business plan can take on a life of its own, so thinking a little about what you want to include in your plan is no more than common prudence.

Second, as you'll soon learn if you haven't already, business plans can be complicated documents. As you draft your plan, you'll be making lots of decisions on serious matters, such as what strategy you'll pursue, as well as less important ones, like what color paper to print it on. Thinking about these decisions in advance is an important way to minimize the time you spend planning your business and maximize the time you spend generating income.

To sum up, planning your plan will help control your degree of accountability and reduce time-wasting indecision. To plan your plan, you'll first need to decide what your goals and objectives in business are. As part of that, you'll assess the business you've chosen to start, or are already running, to see what the chances are that it will actually achieve those ends. Finally, you'll take a look at common elements of most plans to get an idea of which ones you want to include and how each will be treated.

Determine Your Objectives Close your eyes. Imagine that the date is five years from now. Where do you want to be? Will you be running a business that hasn't increased significantly in size? Will you command a rapidly growing empire? Will you have already cashed out and be relaxing on a beach somewhere, enjoying your hard-won gains?

Answering these questions is an important part of building a successful business plan. In fact, without knowing where you're going, it's not really possible to plan at all.

Now is a good time to free-associate a little bit--to let your mind roam, exploring every avenue that you'd like your business to go down. Try writing a personal essay on your business goals. It could take the form of a letter to yourself, written from five years in the future, describing all you have accomplished and how it came about.

As you read such a document, you may make a surprising discovery, such as that you don't really want to own a large, fast-growing enterprise but would be content with a stable small business. Even if you don't learn anything new, though, getting a firm handle on your goals and objectives is a big help in deciding how you'll plan your business.

Goals and Objectives Checklist If you're having trouble deciding what your goals and objectives are, here are some questions to ask yourself:

• How determined am I to see this succeed?
• Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?
• What's going to happen to me if this venture doesn't work out?
• If it does succeed, how many employees will this company eventually have?
• What will be its annual revenues in a year? Five years?
• What will be its market share in that time frame?
• Will it be a niche marketer, or will it sell a broad spectrum of good and services?
• What are my plans for geographic expansion? Local? National? Global?
• Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?
• If I delegate, what sorts of tasks will I share? Sales? Technical? Others?
• How comfortable am I taking direction from others? Could I work with partners or investors who demand input into the company's management?
• Is it going to remain independent and privately owned, or will it eventually be acquired or go public?

Your Financing Goals

It doesn't necessarily take a lot of money to make a lot of money, but it does take some. That's especially true if, as part of examining your goals and objectives, you envision very rapid growth.

Energetic, optimistic entrepreneurs often tend to believe that sales growth will take care of everything, that they'll be able to fund their own growth by generating profits. However, this is rarely the case, for one simple reason: You usually have to pay your own suppliers before your customers pay you. This cash flow conundrum is the reason so many fast-growing companies have to seek bank financing or equity sales to finance their growth. They are literally growing faster than they can afford.

Start by asking yourself what kinds of financing you're likely to need--and what you'd be willing to accept. It's easy when you're short of cash, or expect to be short of cash, to take the attitude that almost any source of funding is just fine. But each kind of financing has different characteristics that you should take into consideration when planning your plan. These characteristics take three primary forms:

• First, there's the amount of control you'll have to surrender. An equal partner may, quite naturally, demand approximately equal control. Venture capitalists often demand significant input into management decisions by, for instance, placing one or more people on your board of directors. Angel investors may be very involved or not involved at all, depending on their personal style. Bankers, at the other end of the scale, are likely to offer no advice whatsoever as long as you make payments of principal and interest on time and are not in violation of any other terms of your loan.
• You should also consider the amount of money you're likely to need. Any amount less than several million dollars is too small to be considered for a standard initial public offering of stock, for example. Venture capital investors are most likely to invest amounts of $250,000 to $3 million. On the other hand, only the richest angel investor will be able to provide more than a few hundred thousand dollars, if that.

Almost any source of funds, from a bank to a factor, has some guidelines about the size of financing it prefers. Anticipating the size of your needs now will guide you in preparing your plan.

• The third consideration is cost. This can be measured in terms of interest rates and shares of ownership as well as in time, paperwork and plain old hassle.

How Will You Use Your Plan

Believe it or not, part of planning your plan is planning what you'll do with it. No, we haven't gone crazy--at least not yet. A business plan can be used for several things, from monitoring your company's progress toward goals to enticing key employees to join your firm. Deciding how you intend to use yours is an important part of preparing to write it.

Do you intend to use your plan to help you raise money? In that case, you'll have to focus very carefully on the executive summary, the management, and marketing and financial aspects. You'll need to have a clearly focused vision of how your company is going to make money. If you're looking for a bank loan, you'll need to stress your ability to generate sufficient cash flow to service loans. Equity investors, especially venture capitalists, must be shown how they can cash out of your company and generate a rate of return they'll find acceptable.

Do you intend to use your plan to attract talented employees? Then you'll want to emphasize such things as stock options and other aspects of compensation as well as location, work environment, corporate culture and opportunities for growth and advancement.

Do you anticipate showing your plan to suppliers to demonstrate that you're a worthy customer? A solid business plan may convince a supplier of some precious commodity to favor you over your rivals. It may also help you arrange supplier credit. You may want to stress your blue-ribbon customer list and spotless record of repaying trade debts in this plan.

Assessing Your Company's Potential

For most of us, unfortunately, our desires about where we would like to go aren't as important as our businesses' ability to take us there. Put another way, if you choose the wrong business, you're going nowhere.

Luckily, one of the most valuable uses of a business plan is to help you decide whether the venture you have your heart set on is really likely to fulfill your dreams. Many, many business ideas never make it past the planning stage because their would-be founders, as part of a logical and coherent planning process, test their assumptions and find them wanting.

Test your idea against at least two variables. First, financial, to make sure this business makes economic sense. Second, lifestyle, because who wants a successful business that they hate?

Answer the following questions to help you outline your company's potential. There are no wrong answers. The objective is simply to help you decide how well your proposed venture is likely to match up with your goals and objectives.

• What initial investment will the business require?
• How much control are you willing to relinquish to investors?
• When will the business turn a profit?
• When can investors, including you, expect a return on their money?
• What are the projected profits of the business over time?
• Will you be able to devote yourself full time to the business, financially?
• What kind of salary or profit distribution can you expect to take home?
• What are the chances the business will fail?
• What will happen if it does?
• Where are you going to live?
• What kind of work are you going to be doing?
• How many hours will you be working?
• Will you be able to take vacations?
• What happens if you get sick?
• Will you earn enough to maintain your lifestyle?
• Does your family understand and agree with the sacrifices you envision?

Sources: The Small Business Encyclopedia , Business Plans Made Easy, Start Your Own Business and Entrepreneur magazine.

Continue on to the next section of our Business Plan How-To >> Elements of a Business Plan

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated April 17, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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Setting Business Goals & Objectives: 4 Considerations

• 31 Oct 2023

Setting business goals and objectives is important to your company’s success. They create a roadmap to help you identify and manage risk , gain employee buy-in, boost team performance , and execute strategy . They’re also an excellent marker to measure your business’s performance.

Yet, meeting those goals can be difficult. According to an Economist study , 90 percent of senior executives from companies with annual revenues of one billion dollars or more admitted they failed to reach all their strategic goals because of poor implementation. In order to execute strategy, it’s important to first understand what’s attainable when developing organizational goals and objectives.

If you’re struggling to establish realistic benchmarks for your business, here’s an overview of what business goals and objectives are, how to set them, and what you should consider during the process.

Access your free e-book today.

What Are Business Goals and Objectives?

Business objectives dictate how your company plans to achieve its goals and address the business’s strengths, weaknesses, and opportunities. While your business goals may shift, your objectives won’t until there’s an organizational change .

Business goals describe where your company wants to end up and define your business strategy’s expected achievements.

According to the Harvard Business School Online course Strategy Execution , there are different types of strategic goals . Some may even push you and your team out of your comfort zone, yet are important to implement.

For example, David Rodriguez, global chief human resources officer at Marriott, describes in Strategy Execution the importance of stretch goals and “pushing people to not accept today's level of success as a final destination but as a starting point for what might be possible in the future.”

It’s important to strike a balance between bold and unrealistic, however. To do this, you must understand how to responsibly set your business goals and objectives.

Related: A Manager’s Guide To Successful Strategy Implementation

How to Set Business Goals and Objectives

While setting your company’s business goals and objectives might seem like a simple task, it’s important to remember that these goals shouldn’t be based solely on what you hope to achieve. There should be a correlation between your company’s key performance indicators (KPIs)—quantifiable success measures—and your business strategy to justify why the goal should, and needs to, be achieved.

This is often illustrated through a strategy map —an illustration of the cause-and-effect relationships that underpin your strategy. This valuable tool can help you identify and align your business goals and objectives.

“A strategy map gives everyone in your business a road map to understand the relationship between goals and measures and how they build on each other to create value,” says HBS Professor Robert Simons in Strategy Execution .

While this roadmap can be incredibly helpful in creating the right business goals and objectives, a balanced scorecard —a tool to help you track and assess non-financial measures—ensures they’re achievable through your current business strategy.

“Ask yourself, if I picked up a scorecard and examined the measures on that scorecard, could I infer what the business's strategy was,” Simon says. “If you've designed measures well, the answer should be yes.”

According to Strategy Execution , these measures are necessary to ensure your performance goals are achieved. When used in tandem, a balanced scorecard and strategy map can also tell you whether your goals and objectives will create value for you and your customers.

“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” Simons says.

These four perspectives are key considerations when setting your business goals and objectives. Here’s an overview of what those perspectives are and how they can help you set the right goals for your business.

4 Things to Consider When Setting Business Goals and Objectives

1. financial measures.

It’s important to ensure your plans and processes lead to desired levels of economic value. Therefore, some of your business goals and objectives should be financial.

Some examples of financial performance goals include:

• Cutting costs
• Increasing revenue
• Improving cash flow management

“Businesses set financial goals by building profit plans—one of the primary diagnostic control systems managers use to execute strategy,” Simons says in Strategy Execution . “They’re budgets drawn up for business units that have both revenues and expenses, and summarize the anticipated revenue inflows and expense outflows for a specified accounting period.”

Profit plans are essential when setting your business goals and objectives because they provide a critical link between your business strategy and economic value creation.

According to Simons, it’s important to ask three questions when profit planning:

• Does my business strategy generate enough profit to cover costs and reinvest in the business?
• Does my business generate enough cash to remain solvent through the year?
• Does my business create sufficient financial returns for investors?

By mapping out monetary value, you can weigh the cost of different strategies and how likely it is you’ll meet your company and investors’ financial expectations.

2. Customer Satisfaction

To ensure your business goals and objectives aid in your company’s long-term success, you need to think critically about your customers’ satisfaction. This is especially important in a world where customer reviews and testimonials are crucial to your organization’s success.

“Everything that's important to the business, we have a KPI and we measure it,” says Tom Siebel, founder, chairman, and CEO of C3.ai, in Strategy Execution . “And what could be more important than customer satisfaction?”

Unlike your company’s reputation, measuring customer satisfaction has a far more personal touch in identifying what customers love and how to capitalize on it through future strategic initiatives .

“We do anonymous customer satisfaction surveys every quarter to see how we're measuring up to our customer expectations,” Siebel says.

While this is one example, your customer satisfaction measures should reflect your desired market position and focus on creating additional value for your audience.

Related: 3 Effective Methods for Assessing Customer Needs

3. Internal Business Processes

Internal business processes is another perspective that should factor into your goal setting. It refers to several aspects of your business that aren’t directly affected by outside forces. Since many goals and objectives are driven by factors such as business competition and market shifts, considering internal processes can create a balanced business strategy.

“Our goals are balanced to make sure we’re holistically managing the business from a financial performance, quality assurance, innovation, and human talent perspective,” says Tom Polen, CEO and president of Becton Dickinson, in Strategy Execution .

According to Strategy Execution , internal business operations are broken down into the following processes:

• Operations management
• Customer management

While improvements to internal processes aren’t driven by economic value, these types of goals can still reap a positive return on investment.

“We end up spending much more time on internal business process goals versus financial goals,” Polen says. “Because if we take care of them, the financial goals will follow at the end of the day.”

4. Learning and Growth Opportunities

Another consideration while setting business goals and objectives is learning and growth opportunities for your team. These are designed to increase employee satisfaction and productivity.

According to Strategy Execution , learning and growth opportunities touch on three types of capital:

• Human: Your employees and the skills and knowledge required for them to meet your company’s goals
• Information: The databases, networks, and IT systems needed to support your long-term growth
• Organization: Ensuring your company’s leadership and culture provide people with purpose and clear objectives

Employee development is a common focus for learning and growth goals. Through professional development opportunities , your team will build valuable business skills and feel empowered to take more risks and innovate.

To create a culture of innovation , it’s important to ensure there’s a safe space for your team to make mistakes—and even fail.

“We ask that people learn from their mistakes,” Rodriguez says in Strategy Execution . “It's really important to us that people feel it’s safe to try new things. And all we ask is people extract their learnings and apply it to the next situation.”

Achieve Your Business Goals

Business goals aren’t all about your organization’s possible successes. It’s also about your potential failures.

“When we set goals, we like to imagine a bright future with our business succeeding,” Simons says in Strategy Execution . “But to identify your critical performance variables, you need to engage in an uncomfortable exercise and consider what can cause your strategy to fail.”

Anticipating potential failures isn’t easy. Enrolling in an online course—like HBS Online’s Strategy Execution —can immerse you in real-world case studies of past strategy successes and failures to help you better understand where these companies went wrong and how to avoid it in your business.

Do you need help setting your business goals and objectives? Explore Strategy Execution —one of our online strategy courses —and download our free strategy e-book to gain the insights to create a successful strategy.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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Goals and Objectives for Business Plan with Examples

NOV.05, 2023

Every business needs a clear vision of what it wants to achieve and how it plans to get there. A business plan is a document that outlines the goals and objectives of a business, as well as the strategies and actions to achieve them. A well-written business plan from business plan specialists can help a business attract investors, secure funding, and guide its growth.

Understanding Business Objectives

Business objectives are S pecific, M easurable, A chievable, R elevant, and T ime-bound (SMART) statements that describe what a business wants to accomplish in a given period. They are derived from the overall vision and mission of the business, and they support its strategic direction.

Business plan objectives can be categorized into different types, depending on their purpose and scope. Some common types of business objectives are:

• Financial objectives
• Operational objectives
• Marketing objectives
• Social objectives

For example, a sample of business goals and objectives for a business plan for a bakery could be:

• To increase its annual revenue by 20% in the next year.
• To reduce its production costs by 10% in the next six months.
• To launch a new product line of gluten-free cakes in the next quarter.
• To improve its customer satisfaction rating by 15% in the next month.

The Significance of Business Objectives

Business objectives are important for several reasons. They help to:

• Clarify and direct the company and stakeholders
• Align the company’s efforts and resources to a common goal
• Motivate and inspire employees to perform better
• Measure and evaluate the company’s progress and performance
• Communicate the company’s value and advantage to customers and the market

For example, by setting a revenue objective, a bakery can focus on increasing its sales and marketing efforts, monitor its sales data and customer feedback, motivate its staff to deliver quality products and service, communicate its unique selling points and benefits to its customers, and adjust its pricing and product mix according to market demand.

Advantages of Outlining Business Objectives

Outlining business objectives is a crucial step in creating a business plan. It serves as a roadmap for the company’s growth and development. Outlining business objectives has several advantages, such as:

• Clarifies the company’s vision, direction, scope, and boundaries
• Break down the company’s goals into smaller tasks and milestones
• Assigns roles and responsibilities and delegates tasks
• Establishes standards and criteria for success and performance
• Anticipates risks and challenges and devises contingency plans

For example, by outlining its business objective for increasing the average revenue per customer in its business plan, a bakery can:

• Attract investors with its viable business plan for investors
• Secure funding from banks or others with its realistic financial plan
• Partner with businesses or organizations that complement or enhance its products or services
• Choose the best marketing, pricing, product, staff, location, etc. for its target market and customers

Setting Goals and Objectives for a Business Plan

Setting goals and objectives for a business plan is not a one-time task. It requires careful planning, research, analysis, and evaluation. To set effective goals and objectives for a business plan, one should follow some best practices, such as:

OPTION 1: Use the SMART framework. A SMART goal or objective is clear, quantifiable, realistic, aligned with the company’s mission and vision, and has a deadline. SMART stands for:

• Specific – The goal or objective should be clear, concise, and well-defined.
• Measurable – The goal or objective should be quantifiable or verifiable.
• Achievable – The goal or objective should be realistic and attainable.
• Relevant – The goal or objective should be aligned with the company’s vision, mission, and values.
• Time-bound – The goal or objective should have a deadline or timeframe.

For example, using the SMART criteria, a bakery can refine its business objective for increasing the average revenue per customer as follows:

• Specific – Increase revenue with new products and services from $5 to $5.50.
• Measurable – Track customer revenue monthly with sales reports.
• Achievable – Research the market, develop new products and services, and train staff to upsell and cross-sell.
• Relevant – Improve customer satisfaction and loyalty, profitability and cash flow, and market competitiveness.
• Time-bound – Achieve this objective in six months, from January 1st to June 30th.

OPTION 2: Use the OKR framework. OKR stands for O bjectives and K ey R esults. An OKR is a goal-setting technique that links the company’s objectives with measurable outcomes. An objective is a qualitative statement of what the company wants to achieve. A key result is a quantitative metric that shows how the objective will be achieved.

OPTION 3: Use the SWOT analysis. SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. A SWOT analysis is a strategic tool that helps the company assess the internal and external factors that affect its goals and objectives.

• Strengths – Internal factors that give the company an advantage over others. 
• Weaknesses – Internal factors that limit the company’s performance or growth. 
• Opportunities – External factors that allow the company to improve or expand. 
• Threats – External factors that pose a risk or challenge to the company.

For example, using these frameworks, a bakery might set the following goals and objectives for its SBA business plan :

Objective – To launch a new product line of gluten-free cakes in the next quarter.

Key Results:

• Research gluten-free cake market demand and preferences by month-end.
• Create and test 10 gluten-free cake recipes by next month-end.
• Make and sell 100 gluten-free cakes weekly online or in-store by quarter-end.

SWOT Analysis:

• Expertise and experience in baking and cake decorating.
• Loyal and satisfied customer base.
• Strong online presence and reputation.

Weaknesses:

• Limited production capacity and equipment.
• High production costs and low-profit margins.
• Lack of knowledge and skills in gluten-free baking.

Opportunities:

• Growing demand and awareness for gluten-free products.
• Competitive advantage and differentiation in the market.
• Potential partnerships and collaborations with health-conscious customers and organizations.
• Increasing competition from other bakeries and gluten-free brands.
• Changing customer tastes and preferences.
• Regulatory and legal issues related to gluten-free labeling and certification.

Examples of Business Goals and Objectives

To illustrate how to write business goals and objectives for a business plan, let’s use a hypothetical example of a bakery business called Sweet Treats. Sweet Treats is a small bakery specializing in custom-made cakes, cupcakes, cookies, and other baked goods for various occasions.

Here are some examples of possible startup business goals and objectives for Sweet Treats:

Earning and Preserving Profitability

Profitability is the ability of a company to generate more revenue than expenses. It indicates the financial health and performance of the company. Profitability is essential for a business to sustain its operations, grow its market share, and reward its stakeholders.

Some possible objectives for earning and preserving profitability for Sweet Treats are:

• To increase the gross profit margin by 5% in the next quarter by reducing the cost of goods sold
• To achieve a net income of $100,000 in the current fiscal year by increasing sales and reducing overhead costs

Ensuring Consistent Cash Flow

Cash flow is the amount of money that flows in and out of a company. A company needs to have enough cash to cover its operating expenses, pay its debts, invest in its growth, and reward its shareholders.

Some possible objectives for ensuring consistent cash flow for Sweet Treats are:

• Increase monthly operating cash inflow by 15% by the end of the year by improving the efficiency and productivity of the business processes
• Increase the cash flow from investing activities by selling or disposing of non-performing or obsolete assets

Creating and Maintaining Efficiency

Efficiency is the ratio of output to input. It measures how well a company uses its resources to produce its products or services. Efficiency can help a business improve its quality, productivity, customer satisfaction, and profitability.

Some possible objectives for creating and maintaining efficiency for Sweet Treats are:

• To reduce the production time by 10% in the next month by implementing lean manufacturing techniques
• To increase the customer service response rate by 20% in the next week by using chatbots or automated systems

Winning and Keeping Clients

Clients are the people or organizations that buy or use the products or services of a company. They are the source of revenue and growth for a company. Therefore, winning and keeping clients is vital to generating steady revenue, increasing customer loyalty, and enhancing word-of-mouth marketing.

Some possible objectives for winning and keeping clients for Sweet Treats are:

• To acquire 100 new clients in the next quarter by launching a referral program or a promotional campaign
• To retain 90% of existing clients in the current year by offering loyalty rewards or satisfaction guarantees

Building a Recognizable Brand

A brand is the name, logo, design, or other features distinguishing a company from its competitors. It represents the identity, reputation, and value proposition of a company. Building a recognizable brand is crucial for attracting and retaining clients and creating a loyal fan base.

Some possible objectives for building a recognizable brand for Sweet Treats are:

• To increase brand awareness by 50% in the next six months by creating and distributing engaging content on social media platforms
• To improve brand image by 30% in the next year by participating in social causes or sponsoring events that align with the company’s values

Expanding and Nurturing an Audience with Marketing

An audience is a group of people interested in or following a company’s products or services. They can be potential or existing clients, fans, influencers, or partners. Expanding and nurturing an audience with marketing is essential for increasing a company’s visibility, reach, and engagement.

Some possible objectives for expanding and nurturing an audience with marketing for Sweet Treats are:

• To grow the email list by 1,000 subscribers in the next month by offering a free ebook or a webinar
• To nurture leads by sending them relevant and valuable information through email newsletters or blog posts

Strategizing for Expansion

Expansion is the process of increasing a company’s size, scope, or scale. It can involve entering new markets, launching new products or services, opening new locations, or forming new alliances. Strategizing for expansion is important for diversifying revenue streams, reaching new audiences, and gaining competitive advantages.

Some possible objectives for strategizing for expansion for Sweet Treats are:

• To launch a new product or service line by developing and testing prototypes
• To open a new branch or franchise by securing funding and hiring staff

Template for Business Objectives

A template for writing business objectives is a format or structure that can be used as a guide or reference for creating your objectives. A template for writing business objectives can help you to ensure that your objectives are SMART, clear, concise, and consistent.

To use this template, fill in the blanks with your information. Here is an example of how you can use this template:

Example of Business Objectives

Our business is a _____________ (type of business) that provides _____________ (products or services) to _____________ (target market). Our vision is to _____________ (vision statement) and our mission is to _____________ (mission statement).

Our long-term business goals and objectives for the next _____________ (time period) are:

S pecific: We want to _____________ (specific goal) by _____________ (specific action).

M easurable: We will measure our progress by _____________ (quantifiable indicator).

A chievable: We have _____________ (resources, capabilities, constraints) that will enable us to achieve this goal.

R elevant: This goal supports our vision and mission by _____________ (benefit or impact).

T ime-bound: We will complete this goal by _____________ (deadline).

Repeat this process for each goal and objective for your business plan.

How to Monitor Your Business Objectives?

After setting goals and objectives for your business plan, you should check them regularly to see if you are achieving them. Monitoring your business objectives can help you to:

• Track your progress and performance
• Identify and overcome any challenges
• Adjust your actions and strategies as needed

Some of the tools and methods that you can use to monitor your business objectives are:

• Dashboards – Show key data and metrics for your objectives with tools like Google Data Studio, Databox, or DashThis.
• Reports – Get detailed information and analysis for your objectives with tools like Google Analytics, Google Search Console, or SEMrush.
• Feedback – Learn from your customers and their needs and expectations with tools like SurveyMonkey, Typeform, or Google Forms.

Strategies for Realizing Business Objectives

To achieve your business objectives, you need more than setting and monitoring them. You need strategies and actions that support them. Strategies are the general methods to reach your objectives. Actions are the specific steps to implement your strategies.

Different objectives require different strategies and actions. Some common types are:

• Marketing strategies
• Operational strategies
• Financial strategies
• Human resource strategies
• Growth strategies

To implement effective strategies and actions, consider these factors:

• Alignment – They should match your vision, mission, values, goals, and objectives
• Feasibility – They should be possible with your capabilities, resources, and constraints
• Suitability – They should fit the context and needs of your business

How OGSCapital Can Help You Achieve Your Business Objectives?

We at OGSCapital can help you with your business plan and related documents. We have over 15 years of experience writing high-quality business plans for various industries and regions. We have a team of business plan experts who can assist you with market research, financial analysis, strategy formulation, and presentation design. We can customize your business plan to suit your needs and objectives, whether you need funding, launching, expanding, or entering a new market. We can also help you with pitch decks, executive summaries, feasibility studies, and grant proposals. Contact us today for a free quote and start working on your business plan.

Frequently Asked Questions

What are the goals and objectives in business.

Goals and objectives in a business plan are the desired outcomes that a company works toward. To describe company goals and objectives for a business plan, start with your mission statement and then identify your strategic and operational objectives. To write company objectives, you must brainstorm, organize, prioritize, assign, track, and review them using the SMART framework and KPIs.

What are the examples of goals and objectives in a business plan?

Examples of goals and objectives in a business plan are: Goal: To increase revenue by 10% each year for the next five years. Objective: To launch a new product line and create a marketing campaign to reach new customers.

What are the 4 main objectives of a business?

The 4 main objectives of a business are economic, social, human, and organic. Economic objectives deal with financial performance, social objectives deal with social responsibility, human objectives deal with employee welfare, and organic objectives deal with business growth and development.

What are goals and objectives examples?

Setting goals and objectives for a business plan describes what a business or a team wants to achieve and how they will do it. For example: Goal: To provide excellent customer service. Objective: To increase customer satisfaction scores by 20% by the end of the quarter. 

At OGSCapital, our business planning services offer expert guidance and support to create a realistic and actionable plan that aligns with your vision and mission. Get in touch to discuss further!

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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What is a business plan?

1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.

ZenBusiness

A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

» Need help writing? Learn about the best business plan software .

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description. This should contain basic information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.

If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.

» MORE: How to write a successful business plan for a loan

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are some tips to write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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How to Set Goals and Objectives in Your Business Plan

Writing out a business plan is a vital step in starting a new company. It helps you create a roadmap of the future of your company and it's the first place investors look to see if you're for real. However, if your company goals aren't laid out clearly or they're unrealistic, investors won't get on board with your vision.

To guide your company toward success, you need to know what success entails. You'll have a much greater chance of making it if you have a direction to move toward. Goal setting gives your company a target to shoot for in the future.

Big goals don't happen all at once, however. You have to take them step by step and you need to know the objectives you'll have to complete on the way. In this article, we'll show you how to create manageable goals for your business and design a series of actionable objectives leading up to them.

What Are Goals and Objectives for Your Business?

Goals are the big targets in your business planning, while objectives are the actions or landmarks that make up the end goal. Clear goals serve to inspire and rally your team to perform but they're not immediately actionable, specific, or measurable. For example, let's say your business sells computers and your goal this year is to increase your gross revenue. How much gross revenue do you want to bring in? You need an objective amount to aim for.

Let's say you decide to shoot for $300,000 in gross revenue. That means your monthly objective is to make $25,000 in gross revenue ($300,000/12). Your direct cost to make each computer is $500 and you sell each computer for $1,500. That means you need to sell 25 computers a month.

Now, you have a measurable monthly objective, but it's not actionable. You need to give your team specific objectives that will lead them toward achieving the goal. How will they sell an average of 25 computers every month?

Here's a list of some actionable objectives your marketing team could complete to help you reach your sales goal. You should assign objectives directly to an individual or department within your business. Of course, if you're the only member of your business, you'll be doing everything yourself.

• Create two blog posts every week using search engine optimization (SEO) to increase brand awareness.
• Create one product video every month and feature it on social media sites like Facebook, Instagram, and Twitter.
• Create an email list for consumers who fill out a form on your website. Send out a weekly email with exclusive news and promotions about the product.
• Use key performance indicators (KPIs) for the company website to identify the top exit page (where the most visitors leave). Redesign the page.

Decide on Goals for Your Business

How do you decide what your goals should be for your company? Each business's goals will be unique depending on its particular business model. A great place to start the decision-making process is your mission statement. Let's use the same computer company in the following example.

Your mission statement is "to create affordable, easy-to-use computers and offer knowledgeable, friendly, and fast technical support and customer service." There are several keywords in the statement that you can use to develop goals. If you use "fast technical support," your goal might be to increase the speed at which your team responds to customer inquiries.

You can also use other methods to decide your company goals. You might hold a brainstorming session with your team to create your goals or you can set goals about how you'll outperform or reach a different market segment than your competitors.

Here are a few types of goals you might create for your business.

• Operational goals: To be more efficient in your work processes and business strategy
• Profit goals: To increase revenue, reduce costs, or increase market share
• Staff development goals: To train your team, increase their knowledge, or improve their customer satisfaction scores
• Goals for handling problems: To be proactive in dealing with possible market, manufacturer, staff, or product issues and things like natural disasters
• Product goals: To create and release a new product or improve a current one

Evaluate Your Business Goals and Objectives

One of the quickest ways to turn investors off is to include outlandish goals in your business plan. Before they put money into your company, they'll want to know that your goal-setting process is sensible. Both your short-term goals and long-term goals need to be realistic and attainable.

You may believe that your company is capable of achieving incredible results, but investors are practical. For example, no one will believe that your computer shop that currently makes $100,000 in gross revenue will be more profitable than Microsoft in five years.

To prove that your goals are realistic, you'll have to show your work. Create a believable forecast of your future business revenue by analyzing things like your business costs, profit margins, market share, and expected growth.

Using SMART to Analyze Your Business Goals

One way to evaluate your business goals for effectiveness is to use SMART goals . Each letter of the acronym represents a quality that your business goals should have. Here's a breakdown you can follow to make sure you have smart goals:

• Specific: Your objectives should be clear, specific actions. It should also be clear who's responsible for them. For example, your marketing team needs to create an email list.
• Measurable: You should be able to easily gauge your success. For example, you need to sell 25 computers a month to reach your goal. If you sell 23, you may need to adjust your method.
• Attainable: Goals need to be realistic. If you currently sell 15 computers a month, it's very unlikely that you'll immediately start selling 1,000 a month.
• Relevant: Your goals need to be in line with your higher-level goals. Creating a blog and optimizing it to appear high on a search engine results page (SERP) will increase brand awareness and provide a bigger audience of possible new customers.
• Time-bound: Create deadlines for your goals or they'll never get done. For example, your sales team must redesign the landing page for your Facebook Ads by Friday, Nov. 3.

Using OKRs to Measure Business Objectives

Another system you can use for managing goals and objectives is the objective and key results (OKR) method. In the OKR system, the O (objective) is representative of a larger goal, while the KR (key results) represent the smaller objectives you use to measure your progress. Here's an OKR model for your computer sales goal.

• O: Increase profitability for the computer company.
• KR1: Make $300,000 in gross profit for the year.
• KR2: Sell 25 computers every month.

Skynova Can Help You Manage All Your Accounting Goals

Generally, investors are more interested in where your company is going than where it currently is. If they're going to put money into it, they need to see that you have the initiative to grow your business and give them a big return on their investment. Use your business plan to give them a clear understanding of your goals and objectives and you'll have a greater chance of getting their backing.

No matter what type of business you run, you likely want to spend your time growing it, not doing administration. Skynova's software products can help you manage your accounting tasks quickly and easily. Take a look at how simple our business templates and accounting software can make your business processes.

Notice to the Reader

The content within this article is designed to provide a basic explanation of goal- and objective-setting for a small business. It isn't tailored to any specific type of business and may not fit your particular company. Before making any big business decisions that could affect your bottom line or presenting your company objectives to investors, you should seek the advice of a certified professional.

Academic Catalog

Busi 95: entrepreneurship-the business plan, foothill college course outline of record, student learning outcomes.

• Students will demonstrate appropriate use of business terms and concepts in their business plans.
• Students will critically analyze, evaluate and interpret information by integrating business knowledge in problem-solving and decision-making processes in their business plans.
• Students will demonstrate their business knowledge and critical thinking in creating their business plans and presentations.

Description

Course objectives.

The student will be able to:

• Identify and understand the characteristics of entrepreneurs.
• Describe the problems involved in starting a small business and potential solutions.
• Develop or enhance an existing business plan.
• Market and pitch the business venture to target customers and other stakeholders, including potential investors.
• Understand competitive economic and sociological environments.

Course Content

• The course provides information about the entrepreneurial strategic process and the skills an entrepreneur needs for real-world business practices
• Financing, policies and procedures
• Organization and management
• Advertising and promotion
• Problems of administrative planning, management, control, finance, case problems, model-buildings and simulated games information
• Emphasis on the preparation and presentation/pitching of a business plan to the class for their final grade

Lab Content

Not applicable.

Special Facilities and/or Equipment

Method(s) of evaluation.

Class discussions Written critical analysis of text, handouts (newspaper and periodical publishing) and case studies Oral reports, individual and group projects Quizzes, mid-term and final Term project: business plan and presentation Extensive project in an area of special interest to students

Method(s) of Instruction

Lecture (the primary method of delivery is lecture combined with demonstrations and guest lectures) Discussion Cooperative learning exercises Field work Oral presentations Electronic discussions/chat Demonstration

Representative Text(s) and Other Materials

Barringer, Bruce R.. Entrepreneurship: Successfully Launching New Ventures, 6th ed. . 2019.

Types and/or Examples of Required Reading, Writing, and Outside of Class Assignments

• Weekly reading assignments from text and outside sources, ranging from 50-100 pages per week.

Discipline(s)

Print options.

Send Page to Printer

Print this page.

Download PDF of this page

The PDF will include all information unique to this page.

Foothill College Catalog 2023-2024

A PDF of the entire 2023-2024 catalog.

• Learning & Development

Objectives for training: a guide to writing clear and effective goals

• Posted by by Jack Woodworth
• April 27, 2023
• 5 minute read

Learning and professional development is an essential part of any business, and it’s crucial to ensure that the training your company provides is effective and achieves its intended purpose. This is where setting clear and measurable training objectives comes in.  Objectives for training are specific goals that define what learners are expected to achieve by the time they’ve completed their training . Read on to explore what training objectives are, how they differ from training goals, the purpose of setting training objectives, how to write them, and examples of both objectives and goals.

Training objectives vs training goals

What is the purpose of setting training objectives, examples of training objectives, examples of training goals, key takeaways, what is a training objective.

A training objective is a specific, measurable, achievable, relevant, and time-bound (SMART) statement that defines what learners are expected to achieve by the end of a training program . It is a clear description of the knowledge, skills, and behaviors that the learners should acquire or be able to demonstrate at the end of training. The training objectives you create should be aligned with the overall goals and objectives of your company or organization, and they should be relevant to your learners’ job roles.

While the terms “training objectives” and “training goals” are often used interchangeably, and are similar in nature, they are not identical. 

Training objectives are specific, measurable, and time-bound statements that describe what learners are expected to achieve as a result of participating in a training program. Objectives are usually written from the learner’s perspective and focus on the desired outcomes of the training. You are able to measure results by numbers, percentages, or pass/fail outcomes.  Training goals, on the other hand, are broader statements that describe what the organization hopes to achieve through the training program. Goals are often written from the company or organization’s perspective, and focus on the big-picture outcomes that the training is intended to support. Goals can also be measured numerically or through pass/fail outcomes. Both training objectives and training goals are essential for designing and implementing effective training programs.

The purpose of setting training objectives is to provide clarity both for learners and managers. Clear training objectives inform learners what skills and knowledge they’re expected to gain from the training program, as well as what metrics will be used to evaluate if they gained that knowledge. In turn, managers have a clear direction on how to evaluate if the objective has been achieved or not. Key reasons why it’s important to set training objectives:

• Clarify expectations Training objectives help to clarify what is expected of learners and what they need to achieve to complete the training program successfully. This clarity allows learners to stay focused on the desired outcomes and understand how the training will help them to develop new skills and knowledge.
• Measure progress Training objectives provide a measurable way to track learners’ progress throughout the training program. By setting specific, measurable, and time-bound objectives, you can easily assess whether learners are achieving the desired outcomes and make any necessary adjustments to the training program to ensure that learners are on track.
• Improve learning outcomes By taking time to write clear objectives for training before that training is rolled out, you’re compelled to evaluate if the program you’ve created matches the objective it’s supposed to achieve. This will help you identify any gaps in the training program before you initiate it, instead of after the fact.

How do you write training objectives?

Writing effective training objectives is critical to designing and implementing an effective training program. Here are some clear, actionable tips to creating training objectives:

• Define the desired outcomes The first step in writing training objectives is to clearly define the desired outcomes of the training program. This involves identifying what learners need to know or be able to do by the end of the training program.
• Use the SMART criteria The SMART criteria is a framework for setting effective objectives. SMART stands for S pecific, M easurable, A chievable, R elevant, and T ime-bound. Use this framework to ensure that your objectives are clear, actionable, and achievable within a specified time frame.
• Write from the learner’s perspective When writing training objectives, it’s important to write from the learner’s perspective. Objectives should focus on what learners will be able to do or know by the end of the training program.
• Use action verbs Use action verbs in your objectives to clearly describe what learners are expected to do. For example, use verbs like “identify,” “analyze,” “demonstrate,” or “evaluate.”
• Keep it concise Training objectives should be concise and easy to understand. Use simple language and avoid jargon or technical terms that learners may not understand.
• Prioritize objectives Prioritize your objectives based on their importance to the overall success of the training program. This will help to ensure that learners are focused on the most critical skills and knowledge.
• Test your objectives Ask yourself if the objectives you’ve written align with your company’s overall goals, if the training they correspond to is enough for them to be achieved, and if they’re easy to understand by someone other than you.

Here are some examples of training objectives that are specific to learners in your company:

• Recognize and respond to the 5 most common customer questions As a customer support specialist you will be trained on the most common customer questions and memorize the correct responses to them to be able to assist customers faster and more efficiently.
• Double the number of upsell opportunities proposed during customer consultations As a sales representative in the field you will learn how to identify upsell opportunities when consulting with customers, and how to effectively communicate the value of our products and services to increase your average deal size.
• Learn and implement techniques for securing your electronically stored data You will improve the overall security of your company laptop and/or phone by learning how to properly secure your electronically stored data and minimize the risk of breaches.
• Identify workplace hazards and report them correctly You will learn to spot hazards in the workplace, and how to correctly document and report them to decrease the overall risk of workplace injury to yourself and others.

Here are some examples of training goals. Each goal corresponds to the example training objectives above, and shows how those objectives contribute to the overall company training goal:

• Improve customer satisfaction rating By training all employees on the most common questions and complaints, the company’s overall rating should reach at least 4 stars by the end of the year.
• Increase upsell revenue by 25% By training sales representatives on how to identify and approach upsell opportunities with customers, the overall company revenue from upsells should increase.
• Improve overall company security By delivering cybersecurity training to all employees the security of the company’s data should improve and lead to fewer breaches.
• Decrease the number of workplace accidents By training all employees on workplace hazards and how to prevent them, the overall number of accidents on job sites should decrease.

Simplify employee training with a powerful microlearning app

What are the 3 objectives of training?

The three objectives of training in an organization are:

• Help each member of your team perform their job roles effectively
• Improve overall performance
• Increase the organization’s ability to achieve its goals and targets

What are SMART objectives of training?

SMART objectives are specific, measurable, achievable, relevant, and time-bound objectives that define what learners are expected to achieve by the end of a training program. SMART objectives help to ensure that the objectives are clear, measurable, and achievable.

From training objectives, to goals, to success

Setting clear training objectives is essential for any training program’s success. They provide learners with direction and focus, measure training effectiveness, and motivate learners to take ownership of their learning. Using the SMART framework will help you provide clarity and ensure that your objectives are aligned with your company’s overall goals. By setting clear and measurable objectives, you’ll improve the effectiveness of your training programs and help your whole team reach their fullest potential.

• Training objectives are specific, measurable, achievable, relevant, and time-bound statements that define what learners are expected to achieve by the end of a training program.
• Training goals describe the overall purpose or aim of the training program, while objectives are specific and measurable outcomes.
• The purpose of setting training objectives is to provide direction and focus, measure training effectiveness, and motivate learners.
• Effective training objectives should be aligned with your organization’s overall goals and objectives, use the SMART framework, and be simple and easy to understand.
• Clear and measurable training objectives are essential for improving the effectiveness of training programs and achieving desired outcomes.

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How to Set, Track, and Achieve Business Objectives with 60 Examples

By Kate Eby | April 10, 2023

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Businesses that set objectives make better decisions. Business objectives allow companies to focus their efforts, track progress, and visualize future success. We’ve worked with experts to create the most comprehensive guide to business objectives.

Included in this article, you’ll find the differences between business objectives and business goals , the four main business objectives , and the benefits of setting business objectives . Plus, find 60 examples of business objectives , which you can download in Microsoft Word.

What Is a Business Objective?

A business objective is a specific, measurable outcome that a company works to achieve. Company leaders set business objectives that help the organization meet its long-term goals. Business objectives should be recorded so that teams can easily access them. 

Business objectives cover many different factors of a company’s success, such as financial health, operations, productivity, and growth. 

One easy way to make sure that you are setting the right business objectives is to follow the SMART goal framework . SMART objectives are specific, measurable, achievable, relevant, and time-bound. 

To learn about setting project objectives using the SMART framework, see this comprehensive guide to writing SMART project objectives .

Business Objectives vs. Business Goal

A business goal is a broad, long-term outcome that a company works toward. Goals usually inform which strategies that department leaders will implement. A business objective , however, is a specific, short-term outcome or action that helps the company achieve long-term goals.

Although the terms are often used interchangeably, goals and objectives are not the same . In general, goals are broad in scope and describe an outcome, while objectives are narrow in scope and describe a specific action or step. 

While these differences are important to understand, many of the common frameworks for successful goal-setting — such as SMART, objectives and key results ( OKRs ), and management by objectives (MBO) — can be useful when writing business objectives. 

When deciding on objectives for a team or department, keep in mind the overarching goals of a business. Each objective should move the company closer to its long-term goals.

Project Goals and Objectives Template

Download the Project Goals and Objectives Template for Excel | Microsoft Word | Adobe PDF

Use this free, printable template to learn how to break down project goals into individual objectives using the SMART framework. Write the primary goal at the top of the worksheet, then follow the SMART process to create one or more specific objectives that will help you achieve that goal. 

For resources to help with setting and tracking goals at your company, see this all-inclusive list of goal tracking and setting templates .

What Are the Four Main Business Objectives?

The four main business objectives are economic, social, human, and organic. Each can help a business ensure their prolonged health and growth. For example, human objectives refer to employees’ well-being, while economic objectives refer to the company’s financial health. 

These are the four main business objectives:

• Example: Reduce spending on paid advertisements by 20 percent.
• Example: Reduce average customer wait times from eight minutes to four minutes. 
• Example: Hire two new chemical engineers by the end of Q2.
• Example: Improve the efficiency of a specific software product by 15 percent.

Types of Business Objectives

There are many types of business objectives beyond the main four. These range from regulation objectives to environmental objectives to municipal objectives. For example, a global objective might be to distribute a product to a new country. 

In addition to economic, social, human, and organic objectives, here are some other types of business objectives companies might set: 

• Regulatory: These objectives relate to compliance requirements, such as meeting quality standards or conducting internal audits.
• National: These objectives relate to a company’s place in and how they contribute to the country they operate in, such as promoting social justice causes and creating employment opportunities. 
• Global: These objectives relate to a company’s place in and its contribution to many countries, such as improving living standards and responding to global demands for products and services. 
• Environmental: These objectives relate to a company’s environmental impact, such as reducing chemical waste or making eco-friendly investments. 
• Healthcare: These objectives relate to the health and well-being of a population, whether within or outside an organization. These objectives might be improving healthcare benefit options for employees or refining a drug so that it has fewer side effects.

The Importance of Having Business Objectives

Teams need business objectives to stay focused on the company’s long-term goals. Business objectives help individual employees understand how their roles contribute to the larger mission of the organization. Setting business objectives facilitates effective planning. 

Here are some benefits to setting business objectives:

• Develops Leadership: Company leaders are more effective when they have a clear vision and can delegate tasks to make it a reality. Setting objectives is a great way to improve one’s leadership skills.
• Increases Motivation: People tend to be more invested in work when they have clear, attainable objectives to achieve. Plus, each completed objective provides a morale boost to keep teams happy and productive. 
• Encourages Innovation and Productivity: With increased motivation and workplace satisfaction come more innovations. Set attainable but challenging objectives, and watch teams come up with creative solutions to get things done.
• Improves Strategy: Setting objectives that align with overarching company goals means that everyone across the company can stay aligned on strategic implementation. 
• Enhances Customer Satisfaction: Overall customer satisfaction is more likely to increase over time when measurable quality improvements are in place. 
• Improves Prioritization: When they are being able to see all of the current objectives, team members can more easily prioritize their work, which in turn makes their workloads feel more manageable. 
• Improves Financial Health: Setting economic objectives in particular can help companies stay on top of their financial goals.

60 Examples of Business Objectives

Company leaders can use business objectives to improve every facet of an organization, from customer satisfaction to market share to employee well-being. Here are 60 examples of business objectives that can help a company achieve its goals. 

Economic Business Objectives

• Increase profit margins by 5 percent by the end of the Q4. 
• Recover 50 percent of total outstanding debts from each quarter the following quarter for the next year. 
• “Increase revenue by 10 percent each year for the next five years,” suggests Tyler. 
• Offer three new holiday sales events in the coming year. 
• Move 30 percent of surplus stock by the end of Q2.
• “Reduce costs by 10 percent each year for the next five years,” suggests Tyler.
• Reduce monthly interest payments by 1.5 percent by consolidating debt. 
• Introduce a new credit payment option to expand the potential customer base. 
• Apply for six government grants by the end of the year. 
•  Hire an accountant to track expenses and file the company’s taxes. 
•  Secure a $100,000 loan to start a business.
•  Pitch your business ideas to a venture capital firm. 
• Improve your business credit score from 75 to 85 in two years. 
• Invest in solar panels for your company headquarters to reduce building energy costs by 75 percent. 
• Establish a monthly practice to analyze your cash flow statement.

Social Business Objectives

• Decrease customer average customer wait times by 20 percent in two months.
• Improve the average customer service satisfaction rating from 3.2/5 to 3.8/5 in six months through targeting trainings. 
• Hire a contract UX designer to redesign the company website interface in four months. 
• Decrease customer churn by 15 percent in one year. 
• “Triple the customer base within two years,” suggests Tyler.
• Offer 20 percent more customer discounts and specials over the course of two years. 
• Increase market share by 5 percent in three years. 
• Increase monthly sales quotas for sales associates by 10 percent. 
• Develop a sales incentive program to reward top-performing sales associates with vacations, bonuses, and other prizes. 
• Donate $10,000 to local causes, such as public school funds or local charities. 
• Partner with a charitable organization to host a company-wide 5K.
• Increase your marketing budget by 15 percent.
• Hire a new marketing director by the end of Q3.
• Donate 40 percent of surplus stock to a relevant charity. 
• Increase engagement across all social media platforms by 10 percent with a multiplatform ad campaign.

Human Business Objectives

• Hire three new employees by the end of Q1.
• Hire a contractor to train your IT team on new software. 
• Rewrite and distribute your company values statement. 
• Conduct a quarterly, company-wide productivity training over the next two years. 
• Establish a diversity, equity, and inclusion (DEI) committee. 
• Design and implement a mentorship program for diverse employees. 
• Create an incentive program that grants additional vacation days for all employees when company-wide productivity goals are met. 
• Offer a free monthly happy hour to improve the employee experience. 
• Select change leaders across multiple teams to provide support for a corporate reorg.
• Start three employee resource groups (ERGs) within the next six months. 
• Diversify websites and career fairs where the hiring team recruits applicants to encourage a more diverse pool of candidates for new jobs. 
• Invest in an office redesign that improves the office atmosphere and provides more in-office resources, such as free coffee and snacks, to on-site employees. 
• Upgrade employee laptops to improve productivity and employee satisfaction. 
• Conduct a yearly, comprehensive employee experience survey to identify areas of improvement. 
• Throw office parties to celebrate change milestones. 

Organic Business Objectives

• Increase the top line by 15 percent every year for the next five years.
• Achieve 20 percent net profit from 10 product enhancements in the next two years.
• Decrease raw materials costs by 10 percent by the end of the year.
• Reduce downtime by 25 percent by the end of the year.
• Within two years, attain a rate of 25 percent new revenue from products released within the last year.
• Improve customer acquisition ration by 10 percent every quarter for the next two years. 
• Reduce total inventory levels by 20 percent over four months.
• Interact with at least 20 Instagram users every month for one year.
• Have a new product launch covered by at least three reputable industry publications within two months of the launch date.
• Grow both the top line and the bottom line by 60 percent every year for three years. 
• Reduce product defects by 15 percent every year for four years.
• Increase on-time delivery dates for top customers by 25 percent over the span of three quarters.
• Conduct yearly workplace safety reviews.
• Decrease average customer wait times for responses to social media queries from 45 minutes to 15 minutes by the end of Q4.
• Improve your company website to be on the first page of search results within six months.

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Business Planning - Introduction

Last updated 22 Mar 2021

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The business plan sets out how the owners/managers of a business intend to realise its objectives. Without such a plan a business is likely to drift.

The business plan serves several purposes:it

(1) enables management to think through the business in a logical and structured way and to set out the stages in the achievement of the business objectives.

(2) enables management to plot progress against the plan (through the management accounts)

(3) ensures that both the resources needed to carry out the strategy and the time when they are required are identified.

(4) is a means for making all employees aware of the business's direction (assuming the key features of the business plan are communicated to employees)

(5) is an important document for for discussion with prospective investors and lenders of finance (e.g. banks and venture capitalists).

(6) links into the detailed, short-term, one-year budget.

The Link Between the Business Plan and the Budget

A budget can be defined as "a financial or quantitative statement", prepared for a specific accounting period (typically a year), containing the plans and policies to be pursued during that period.

The main purposes of a budget are:

(1) to monitor business unit and managerial performance (the latter possibly linking into bonus arrangements)

(2 )to forecast the out-turn of the period's trading (through the use of flexed budgets and based on variance analyses)

(3 )to assist with cost control.

Generally, a functional budget is prepared for each functional area within a business (e.g. call-centre, marketing, production, research and development, finance and administration). In addition, it is also normal to produce a "capital budget" detailing the capital investment required for the period, a "cash flow budget", a "stock budget" and a "master budget", which includes the budgeted profit and loss account and balance sheet.

Preparing a Business Plan

A business plan has to be particular to the organisation in question, its situation and time. However, a business plan is not just a document, to be produced and filed. Business planning is a continuous process. The business plan has to be a living document, constantly in use to monitor, control and guide the progress of a business. That means it should be under regular review and will need to be amended in line with changing circumstances.

Before preparing the plan management should: - review previous business plans (if any) and their outcome. This review will help highlight which areas of the business have proved difficult to forecast historically. For example, are sales difficult to estimate? If so why? - be very clear as to their objectives - a business plan must have a purpose - set out the key business assumptions on which their plans will be based (e.g. inflation, exchange rates, market growth, competitive pressures, etc.) - take a critical look at their business. The classical way is by means of the strengths-weaknesses-opportunities-threats (SWOT) analysis, which identifies the business's situation from four key angles. The strategies adopted by a business will be largely based on the outcome of this analysis.

Preparing the Budget

A typical business plan looks up to three years forward and it is normal for the first year of the plan to be set out in considerable detail. This one-year plan, or budget, will be prepared in such a way that progress can be regularly monitored (usually monthly) by checking the variance between the actual performance and the budget, which will be phased to take account of seasonal variations.

The budget will show financial figures (cash, profit/loss working capital, etc) and also non-financial items such as personnel numbers, output, order book, etc. Budgets can be produced for units, departments and products as well as for the total organisation. Budgets for the forthcoming period are usually produced before the end of the current period. While it is not usual for budgets to be changed during the period to which they relate (apart from the most extraordinary circumstances) it is common practice for revised forecasts to be produced during the year as circumstances change.

A further refinement is to flex the budgets, i.e. to show performance at different levels of business. This makes comparisons with actual outcomes more meaningful in cases where activity levels differ from those included in the budget.

What Providers of Finance Want from a Business Plan

Almost invariably bank managers and other providers of finance will want to see a business plan before agreeing to provide finance. Not to have a business plan will be regarded as a bad sign. They will be looking not only at the plan, but at the persons behind it. They will want details of the owner/managers of the business, their background and experience, other activities, etc. They will be looking for management commitment, with enthusiasm tempered by realism. The plan must be thought through and not be a skimpy piece of work. A few figures on a spreadsheet are not enough.

The plan must be used to run the business and there must be a means for checking progress against the plan. An information system must be in place to provide regular details of progress against plan. Bank managers are particularly wary of businesses that are slow in producing internal performance figures. Lenders will want to guard against risk. In particular they will be looking for two assurances:

(1) that the business has the means of making regular payment of interest on the amount loaned, and

(2) that if everything goes wrong the bank can still get its money back (i.e. by having a debenture over the business's assets). Forward-looking financial statements, particularly the cash flow forecast, are therefore of critical importance. The bank wants openness and no surprises. If something is going wrong it does not want this covered up, it wants to be informed - quickly.

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Business planning for a new business (revision presentation), analysing marketing data (revision presentation), corporate objectives, marketing objectives (revision presentation), internal and external influences on marketing objectives, planning a new business (gcse), our subjects.

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Business Plan Development

This course is designed to help prepare future entrepreneurs to formalize and communicate their business idea to a variety of audiences including potential funders such as banks, other lending institutions, government agencies, and venture capitalists. This course will help ensure that future entrepreneurs understand how to conduct a competitor analysis by asking key questions about their competitors. It will also guide them through the process of profiling customers and determining the target market for their goods or services. With this as a background, and drawing on the other courses in this certificate program, future entrepreneurs will be develop a complete business plan for their business venture including all of the financial components, competitive analyses, and customer profiles.

1. Identify, develop and evaluate a business idea. 2. Acquire the entrepreneurial skills required to gather and analyze industry information, potential markets, assess the impact of competitors and define the needs of potential customers. 3. Analyze the environment or industry in which the proposed business will exist. 4. Conduct a feasibility analysis. 5. Create a customer profile. 6. Analyze the competition and determine their impact on your proposed business venture. 7. Produce strategies to address the competition.

1. Creating a New Business from the Ground‐up 2. Competitor Analysis 3. Customer Profile 4. Business Planning

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Charting Your Course: Crafting a Winning Real Estate Business Plan

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Real Estate Business Plan Template: How to Write a Real Estate Business Plan for Real Estate Agents with Examples

Kristal Sepulveda, CPA

April 30, 2024

Starting a real estate career opens up a world of opportunities for you to develop a successful and rewarding career. With over 1,162,364 Real Estate Sales & Brokerage businesses operating in the US as of 2023, the industry is vibrant and full of potential.

But the prospect of navigating a competitive market and managing financial uncertainties, such as a commission-based income structure, can be intimidating. What if there's a powerful tool that can transform your real estate journey from fear to fulfillment? You only need a real estate business plan as your guide.

Further Reading: 5 Benefits of Using a Business Plan Templates to Launch Your Dream in 2024

Market Analysis and Strategic Planning

Target market identification.

Define your target market within the real estate industry, whether you're focusing on first-time homebuyers, luxury real estate markets, or specific geographic locations. Identifying your target market will dictate your marketing strategies and the type of property listings you will focus on.

This step is essential in creating a solid business plan that helps align your business goals with the clients you want to attract, providing a roadmap to success for your real estate business.

Competition and SWOT Analysis

Conduct a thorough analysis of your competitors in the real estate market. Understand their strengths and weaknesses and position your real estate agent business to take advantage of the opportunities and minimize the threats.

This SWOT analysis is a vital component of a well-crafted business plan , helping you to identify opportunities and threats and craft a winning real estate business plan. It’s a strategic approach that supports your business objectives, including financial projections and SMART goals.

Marketing Strategies

Develop comprehensive marketing strategies to generate leads. This could include digital marketing campaigns, leveraging Zillow Premier Agent for increased exposure, or traditional methods such as networking events and real estate listings publications.

Your marketing plan should detail how you plan to attract and serve your clients effectively, which is a fundamental aspect of every real estate agent’s roadmap for success.

This strategic planning is integral to creating a business plan that helps build a successful real estate business, driving results over time and adapting to changes with progress and make adjustments as needed.

Further Reading: Learn How Real Estate Accounting Services Streamline Property Management

Mission and vision statement, defining your mission.

Clearly define your mission for aligning your business activities with your company’s goals. Your realtor business plan should articulate what you aim to achieve in the short term and how you serve your clients' needs.

A well-defined mission statement not only guides your marketing efforts but also ensures that every aspect of your operations helps you achieve your objectives.

This clarity is fundamental in both real estate business plan examples and a sample real estate business plan, providing a foundation for all strategic decisions.

Crafting a Vision Statement

Your vision statement should outline where you see your business in one to five years. It sets the tone for your business growth and provides a clear direction for future aspirations. This vision becomes a pivotal part of your real estate business plan, helping to direct both your current actions and your long-term strategies.

A real estate broker should have a clear vision as it helps in conducting a SWOT analysis, creating a plan, and ensuring that you update it regularly to reflect changes in the business and market. This forward-looking approach is key to not just plan to succeed but also to adapt and grow in the dynamic real estate market.

Financial Planning and Projections

Financial plan section.

Include a detailed financial plan section in your real estate agent business plan. This should cover projected cash flow , expected average sales price of real estate listings, and anticipated revenue. Define key performance indicators (KPIs) to monitor business performance and make informed decisions.

Such measures are essential to achieving the real estate business goals outlined in your plan and ensuring that your real estate investment business plan aligns with your company's mission statement. This section provides a clear overview of the real estate market dynamics and your business' financial health aligned to your real estate business plan.

Budgeting and Forecasting

Develop a marketing budget and include projections for lead generation costs. Your financial plan should also detail how you'll manage the balance between personal and business finances, ensuring sustainability and growth.

Effective budgeting and forecasting are instrumental in maintaining the financial stability of your business and are key strategies that help you craft a path toward achieving your goals for future success.

Whether you are buying or selling properties, a well-organized budget supports your business operations and keeps your financial objectives on track, as detailed in your real estate business plan .

Implementation and Operations

Crm and lead generation strategies.

Implement customer relationship management (CRM) systems to enhance client relationships and streamline lead generation. Effective lead generation strategies are vital for maintaining a pipeline of potential clients.

Plan of Action

Your business plan should include a solid plan of action for both agents and brokers. This plan outlines specific steps to take when meeting your goals, from acquiring new clients to closing sales. It should also specify areas to focus on for business development and client satisfaction.

Monitoring and Adapting

Regular updates.

A successful real estate business plan is not static. Revisit your business plan regularly to update it as market conditions change and new opportunities arise. This ongoing revision helps keep you on track and responsive to the dynamic real estate market.

Adaptation Strategies

As the real estate market evolves, so should your strategies. Whether it's adopting new marketing techniques or expanding into real estate development, your business plan should provide a flexible framework that allows for growth and adaptation.

Roles of Accounting and Bookkeeping in Crafting a Real Estate Business Plan

Accurate financial reporting.

Proper accounting ensures that all financial transactions are accurately recorded, providing real-time insights into the business's financial status. This includes tracking income from property sales, rental revenues, commission amounts.

This also includes all associated expenses such as marketing costs, office overhead, and employee salaries. Accurate financial reporting allows real estate businesses to understand their cash flow, profitability, and financial stability for long-term planning.

Effective bookkeeping helps real estate agents and companies prepare for future expenses and revenues by creating detailed budgets and financial forecasts. By analyzing past financial data, businesses can predict future trends, plan out their financial year, and set realistic goals for growth.

Budgeting helps in allocating resources efficiently, ensuring that funds are available for important investments like marketing campaigns, new property listings, and technology upgrades. Forecasting, on the other hand, assists in anticipating market fluctuations, helping businesses to prepare in advance for economic downturns or booms.

Investment Analysis

For real estate investors and developers, accounting and bookkeeping provide the tools needed to analyze the viability of potential property investments. Detailed financial records help in calculating key investment metrics such as the return on investment (ROI), net present value (NPV), and internal rate of return (IRR).

These figures are essential for making informed decisions about where to allocate resources and which properties offer the best potential returns on investment.

Compliance and Regulatory Reporting

Real estate businesses must comply with various regulatory requirements, including tax obligations and financial reporting standards. Good bookkeeping practices ensure that all financial activities are transparent and comply with laws and regulations to avoid legal issues. It also simplifies the process of preparing and submitting necessary documents to government agencies, such as tax returns and annual financial statements, which are often required by law.

Risk Management

Effective accounting and bookkeeping help identify financial risks before they become significant problems. Regular reviews of financial statements allow businesses to spot trends such as decreasing cash flow, increasing debt levels, or overdue receivables that could impact the business' financial health. Addressing these issues promptly can prevent larger financial difficulties in the future.

Supporting Loan Applications

As real estate businesses seek external financing, lenders require detailed business plans and financial reports to assess their creditworthiness. Well-organized financial records that demonstrate profitability and stable financial management can increase the likelihood of obtaining financing. Lenders often look for a clear financial plan with solid projections and evidence of good financial health before they approve loan applications.

A well-structured real estate business plan keeps your strategic objectives on track and outlines clear steps for growth. Also, accessing a free real estate business plan can provide a foundational template to customize and adapt.

This ensures you cover all necessary aspects without incurring initial costs. This approach not only helps in organizing your business model but also in securing potential investments and partners.

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• Business and industry
• Trade and investment
• Export finance
• UK Export Finance Business Plan 2024-29
• UK Export Finance

UK Export Finance Business Plan 2024-2029

Published 30 April 2024

© Crown copyright 2024

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected] .

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This publication is available at https://www.gov.uk/government/publications/uk-export-finance-business-plan-2024-29/uk-export-finance-business-plan-2024-2029

1. Executive Summary

This is UK Export Finance’s (UKEF’s) 5‑year strategic plan. It sets out how UKEF will grow the impact it delivers for the UK public, looking out to 2029.

UKEF supports UK exports – from companies large and small – helping to create economic growth and support jobs across the UK. It also creates wider impacts, like bolstering the UK’s leadership in green industries and building commercial partnerships with fast growing developing markets.

1.1 The structure of our plan

Delivery objectives.

Five objectives setting out the real‑world impact UKEF will target over the next five years.

Five‑year milestones

Puts a number on our ambition by setting out our numerical expectation of the impact we will create by 2029.

Strategic enablers

Describe how UKEF will evolve as an organisation to deliver the best service possible for our customers.

1.2 Our strategic enablers

• Putting the customer at the heart of everything we do
• Being purposeful and responsible with our risk taking
• Making UKEF the best place to work for our people
• Ensuring we have the right digital and data solutions to inform our activities
• Ensuring UKEF is an agile, fit-for-purpose organisation

1.3 Our objectives and five-year milestones

2. foreword.

I am exceptionally proud to present UK Export Finance’s (UKEF) next business plan. When I took on the role of UKEF’s Chief Executive Officer, I saw first‑hand the impact we have, and the momentum and drive of a department committed to serving its customers and delivering for the taxpayer. In that spirit, I set out my priorities for the department: maximising our real‑world impact, delivering services for our customers, growing the reach and relevance of our support, and continuing to invest in our people to ensure UKEF remains a great place to work. This plan builds on those priorities and sets out the department’s guiding strategy for the next five years. It is rightly bold, ambitious and challenging, and will deliver impact across the UK and in communities overseas.

Our mission has changed since our last business plan. We are now aiming to advance prosperity by ensuring no viable UK export fails for lack of finance or insurance, doing that sustainably and at no net cost to the taxpayer. Those principles – of delivering prosperity to individuals and communities, of doing our business sustainably, and of upholding our responsibility to the UK taxpayer – underpin all the work we do and our approach to supporting UK exporters.

This business plan also marks a shift for the department. UKEF has a proud track record of delivering tangible outcomes for our customers and partners, helping UK businesses realise their global ambitions. Our success will always be their success. Now we are also putting that impact at the heart of our business plan for the first time.

This approach is about recognising the strength of the UKEF offer and the role we can play as a catalyst for the UK economy – whether supporting the low‑carbon transition or using our deep sectoral understanding, global relationships and the opportunities created by new free trade agreements to get more UK businesses involved in large international projects. It is already guiding our strategic focus, most obviously in our new objectives and our Sustainability Strategy that I am pleased to launch alongside this business plan.

For our customers, this plan means a reaffirmation – and evolution – of the UKEF proposition. It means more digital services, a better user experience and a continued commitment to deliver innovative and game‑changing solutions that work for them, so that UKEF can unlock the finance they need to export. But our customers are not the only stakeholders we serve. We also have a responsibility to the taxpayer – to ensure that our services are delivered in a way that delivers value for money, protects against the risk of financial crime, and mitigates effectively against the risk of default.

Our ambitions build on strong foundations. Under our last business plan, we grew our portfolio, diversified our customer base and product range, and played a pivotal role in the response to some of the most pressing challenges of our time – the pandemic, the invasion of Ukraine and climate change.

None of this would have been possible without UKEF’s greatest asset: our people.

As we enter this next period, we will continue to invest in them, ensuring UKEF remains a place where talented people choose to build their careers, motivated by the real impact we have on the world.

Tim Reid, Chief Executive Officer

3. ukef’s strategic context.

Our world has faced a series of crises that have upended norms and led to a substantial global realignment. The pandemic, the war in Ukraine, persistent inflation and the effects of climate change are all having marked impacts not just on the UK but across the world. Against this backdrop, UKEF will play a key role in growing the UK’s trade base, supporting a greater value and volume of exports across this period.

Looking across the period of the business plan, the fundamentals of UKEF’s work will not change. The UK is a major exporting nation, and throughout our history UK companies have sold their goods and services across the world. Our core purpose remains as relevant as ever – but our offer will need to evolve. While UK service exports have stayed strong due to a deep comparative advantage across financial, cultural and business services, our goods exports are currently below pre‑pandemic levels. We will need to do more to help bring the domestic benefits of trade to more businesses large and small. This will mean supporting more exporters, significantly scaling the number of small and medium‑sized enterprises (SMEs) we support in all regions of the UK, and better targeting those who are underserved, such as ethnic‑minority and women‑led businesses.

At the same time, this is an era of global challenges – from climate change and biodiversity loss to the slowing progress towards poverty reduction and an uncertain economic environment. Export credit agencies are increasingly looked to not only to fulfil a market gap, but also to support their governments’ wider international and domestic policy objectives. Geopolitical tension and uncertainty is leading to increased global defence spending and a focus on building greater supply chain security – requiring us to continue to play a pivotal role in financing exports from the UK’s world‑leading defence and aerospace sectors. The imperative of addressing climate change means we will also need to expand our provision of clean growth and transition finance. And we will increase our financing for social infrastructure in developing countries, helping to build strong trading and investment partnerships with the markets of the future.

We live in an increasingly contested and volatile world. Trade can help us solve the problems of our time, unlocking the potential of British businesses, growing economies across the world and bringing the benefits of the climate transition to all. Helping UK businesses seize the opportunities of a changing world is the core of our 2024‑29 business plan.

4. Our mission, vision and values

UKEF is a purpose‑led organisation. We embed our vision and mission across our business, driving progress against the government’s priorities, delivering value for our customers and ensuring UKEF remains a great place to work.

Our mission

We advance prosperity, ensuring no viable UK export fails for lack of finance or insurance, doing that sustainably and at no net cost to the taxpayer.

To empower UK businesses, drive local growth and create a global impact.

5. Our impact

Each year, UKEF provides billions of pounds of financial support, helping businesses across the whole of the UK to export. This support makes a crucial difference, allowing UK firms – large and small – to grow by tapping into the enormous opportunities that global markets provide. This is at the core of our mandate, but the real‑world impact of our work is much wider: from supporting quality jobs in local communities in the UK and driving place‑based growth, to financing clean energy technologies that are needed for the global low‑carbon transition, and helping build much needed infrastructure in emerging economies.

Across the financial sector, firms are increasingly considering the impact of their finance and how they can drive better outcomes for customers and communities across the world. As a government department and a key tool for the UK government’s economic and foreign policy agenda, it is right that we do the same. Our staff consistently report that it is the impact of what we do that sets us apart and helps make UKEF a great place to work. Whether this is helping a small, local business in Teesside win a place in an overseas project, or financing a hospital to be built in Angola, our support touches individuals and communities across the world.

To ensure we fully understand the impact of our support, we have developed an impact framework, stemming from our mission statement, that sets out three thematic outcomes which UKEF support drives. Most importantly we support the UK’s prosperity, enabling firms to win contracts, create employment opportunities and pay higher wages. We have a sustainability impact, which includes supporting the low‑carbon transition. And we contribute to the UK government’s public policy aims, such as levelling up and the international development strategy. We work alongside the other public finance institutions in the UK, maximising the impact public finance can have and catalysing benefits for UK businesses through our combined approaches.

Our approach to impact has informed the development of this plan, with each of our delivery objectives aligned to the impact we want to have on the world. We are committed to ensuring that every strand of our operations – from our people, to how we use data and insights, to our approach to managing risk – are all focused on maximising the impact of our finance and support. The public rightly has high expectations for how their money is spent. This approach will give us assurance that we are driving positive outcomes while remaining responsible and appropriate with the amount of risk we take.

6. Delivery objectives for 2024-29

Our five delivery objectives set out what ukef will do to achieve our mission and continue to drive impact over the next five years:.

Catalyse UK trade through UKEF’s world-leading export finance and insurance offer

Significantly increase the number of SMEs that benefit from UKEF’s support

Support a broad range of businesses to export, driving local growth across all regions of the UK

Position UK exporters and suppliers at the heart of the global low-carbon transition

Use our finance in developing markets to create positive impact on communities overseas and in the UK

7. Objective 1: Catalyse UK trade through UKEF’s world-leading export finance and insurance offer

UKEF’s offering is our core strength – government‑backed finance on commercial terms that is focused on enabling British businesses to win contracts, fulfil orders and get paid. We will use our finance and insurance in support of the government’s trade agenda, driving UK exports, maintaining our place as a world‑leading export credit agency and expanding our support to more businesses than ever.

Support UK firms to win over £12.5 billion of export contracts by 2029

Enable £5 billion of finance to help exporters build their capability by 2029

7.1 How we will achieve this

8. objective 2: significantly increase the number of smes that benefit from ukef’s support.

The importance of the UK’s SMEs should not be understated. Comprising over 99% of all British businesses, they account for three‑fifths of employment and half of turnover in the private sector. Located across all regions and nations of the UK, these businesses provide local employment opportunities, bring UK expertise into global supply chains and are the heart of the UK economy. We want to support more SMEs that are looking to export and address the challenges they face in securing finance or insurance from the private sector. Underpinned by our trade finance products, including the General Export Facility, we will build on our historic successes and broaden our reach to even more of these businesses.

Support 1,000 SMEs per year before 2029

8.1 How we will achieve this

Expanding our reach to fill our addressable market for smes.

• Making it easier for SMEs to access our support, with more digital and automated services and quicker response times
• Delivering a targeted offering for smaller SMEs that struggle to access finance, covering both experienced and new exporters
• Doing more to help SMEs access finance from the private market
• Onboarding alternative finance providers that specialise in financing SMEs
• Better connecting SMEs with the projects that UKEF supports overseas, helping them win contracts
• Developing our offer for the overseas buyers of SMEs
• Modernising and expanding our insurance offering
• Delivering more targeted marketing and communications to build awareness of the UKEF offer

9. Objective 3: Support a broad range of businesses to export, driving local growth across all regions of the UK

UKEF is the export credit agency for the whole of the UK, so it is important that the benefit of our support is available to all businesses – irrespective of location, size or ownership. We know that underserved businesses have huge potential, but face barriers to accessing finance.

We are committed to increasing the impact we have on customers from underserved groups and ensuring that all regions and nations of the UK can benefit from UKEF’s offer.

Maintain a minimum of 80% of the businesses we support based outside of London over the business plan period

Measure the number of underserved businesses we support, setting a baseline and increasing the proportion of these businesses year-on-year

9.1 How we will achieve this

10. objective 4: position uk exporters and suppliers at the heart of the global low-carbon transition.

UKEF was one of the first export credit agencies to commit to reaching net zero by 2050, and we remain strongly committed to using our finance to facilitate the net zero transition. To achieve this, we will work with our partners to maximise positive climate impacts and mitigate negative ones, helping to accelerate the global transition to low‑carbon and climate‑resilient economies. We will enable the export of clean growth technologies, playing our part to bolster the UK as the world’s leading hub for green finance.

Provide £10 billion of clean growth finance to accelerate the UK’s green export sector by 2029

10.1 How we will achieve this

11. objective 5: use our finance in developing markets to create a positive impact on communities overseas and in the uk.

UKEF’s finance in developing and emerging markets can create mutual benefits, securing UK export wins and helping to deliver the infrastructure and other priority projects overseas that create economic growth. We know that developing countries will need vast quantities of finance to unlock clean and sustainable growth. UKEF actively mobilises finance into developing markets, de‑risking deals for commercial lenders and investors, and we remain committed to reforming and greening the international financing system. Over the course of this business plan, we will continue to contribute to the UK government’s international development offer, bringing the benefits of our support to the countries that need it the most.

Mobilise £10 billion of finance in low- and middle-income countries

11.1 How we will achieve this

12. our strategic enablers, 12.1 the blueprint for our delivery.

Our strategic enablers set a blueprint for achieving our business plan objectives. We have identified five enablers that will chart the path for us to deliver and will act as key areas of transformation over the next five years.

13. Customers

13.1 putting the customer at the heart of everything we do.

Serving the customer – UK exporters and those who buy from them – is at the core of our plan. We want our customers to benefit from clear, easy-to-use services. This means greater digitalisation to provide faster response times, innovative product development to respond to their needs, and consistent stakeholder engagement so our customers feel confident in our offering.

13.2 How we will achieve this

14. risk taking, 14.1 being purposeful and responsible with our risk taking.

Within our legislative and policy framework, effectively managing risk is key to everything we do. Due to the nature of our work – complementing the private sector, rather than competing with it – our portfolio tends to have a higher risk profile, a focus on emerging market risks, longer risk horizons and greater risk concentrations across certain sectors and geographic regions.

To manage this effectively, we must also act within our risk appetite using an appropriate risk management framework. Over the next five years, we will continue to strike that balance between ambition and responsible risk management, so that we can take the right risks to deliver against our objectives.

14.2 How we will achieve this

15.1 making ukef the best place to work for our people.

It is our people that shape our culture, uphold our values and who will ultimately make this plan a reality. Their knowledge, skills, creativity, and dedication will be what enables us to deliver on the strategy and ambitions we have mapped out for the next five years.

For UKEF to succeed, we must continue to build a working environment where our people feel valued, supported, and able to reach their full potential.

15.2 How we will achieve this

16. digital and data solutions, 16.1 ensuring we have the right digital data solutions to inform our activities.

A vast quantity of data flows into UKEF and is generated by UKEF every day.

Making sense of this data is key to ensuring our offer remains at the forefront of good practice, and that all our decision-making is evidence-driven and insight-rich.

Data and insights are the foundation of our organisation’s ability to take informed decisions, understand risks and secure business opportunities, and our use of technology helps us leverage this. Over the next five years we will continue on our path to becoming an insight‑driven organisation.

16.2 How we will achieve this

17. governance and accountability, 17.1 ensuring ukef is an agile, fit-for-purpose organisation.

UKEF is committed to high standards of governance and accountability, and as a ministerial government department, to delivering to the highest standards within our statutory remit for our ministers and wider stakeholder base.

Following the UK’s departure from the EU, this also includes opportunities created by our independent role in international forums to influence the wider enabling architecture for export credits. This will enable us to deliver our services more effectively and deliver on the government’s broader policy agenda.

17.2 How we will achieve this

18. our fiscal responsibility, 18.1 delivering value for taxpayers’ money.

UKEF operates at no net cost to the taxpayer over the long run, maintaining high standards of responsibility by adhering to the UK government’s Managing Public Money principles, and acting in accordance with our financial obligations as set out in HM Treasury’s Consent and UKEF’s governing legislation. We operate within an exposure limit and charge a premium that covers both the risk we take on and our operating costs. We have a number of financial objectives and a series of detailed risk policies, procedures and individual risk methodologies which determine how we assess, measure, manage and report the categories of financial risk we are exposed to.

One of the ways we can report on the level of financial risk we are taking on is through our measurement of maximum liability, which reflects the theoretical maximum value of claims payable across the portfolio. We are constrained on the amount of business we can underwrite by our maximum commitment limit, which sets out the maximum amount of exposure we are allowed to take.

But it is not only fiscal risk we manage. We monitor and assess a variety of other non‑credit risks, including:

• fraud, bribery and corruption, safeguarding taxpayer funds and avoiding loss occurring through export transactions tainted by financial crime
• legal risks, ensuring compliance with public law principles and applicable legislation and ensuring that UKEF’s documentation protects its position
• sustainability, environmental, social and governance risks, including the risk of supporting projects that do not adhere to human rights and modern slavery standards
• ensuring debt related to the transactions we support is consistent with sustainable lending principles

Our ministers and the UK taxpayer need to be confident that we remain a model of responsible and purposeful risk management. We will continue to proactively manage our risk and adhere to our fiscal requirements in pursuit of delivering our mission.

19. Contact us

[email protected]

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